A Captive Land : The people of Nepal have become hostages to terror.

The Himalayan kingdom of Nepal looms large in the Western imagination. But the mountain redoubt that once sat peacefully between India and China is no Shangri-La. Since Maoist insurgents first took to the hills seven years ago, Nepal has known little but bloodshed and carnage. And the last 12 months have been the bloodiest of all. While the death toll since the start of the war in 1996 has reached 7,198, more than 5,000 Nepalese have been killed in the cross-fire in the last year alone. "The Shangri-La myth has been exported for so long that it's working against Nepal now," says Kunda Dixit, editor and publisher of Nepali Times and Himal Magazine. "Because foreigners believe the myth so completely, it makes it impossible for them to imagine that such nasty things are happening here."

Nepal is now effectively paralyzed by terror. The Maoists control some 40 percent of the country, where they mete out their brand of justice in "people's courts" and conscript one child from every household. Bombings, kidnappings and murders in the night are routine. National elections, scheduled to be held this past fall, were indefinitely postponed after the communist guerrillas threatened attacks. When rebels ordered the schools closed in December, a string of bombings kept 5.2 million children at home for weeks. Nearly half the Royal Nepalese Army's 60,000 troops are kept busy guarding the country's infrastructure. Which leaves the Maoists--whose People's Army is believed to consist of 5,000 regulars and 15,000 militiamen- -a relatively free hand in "taxing" the ...